Mastery Exam TEST BANK WITH ALL VERSIONS OF THE EXAM WITH ALLMODULES COVERED | ACCURATE AND VERIFIED QUESTIONS AND ANSWERS FOR GUARANTEED PASS| LATEST UPDATE

Which of the following statements is true? A) Only corporations can raise funds in the capital markets. B) Only the federal government and municipalities can raise funds in the capital markets. C) Only municipalities can raise funds in the capital markets. D) Municipalities, the federal government, and corporations can raise funds in the capital markets. - ANSWER D) Municipalities, the federal government, and corporations can raise funds in the capital markets. Local government investment pools (LGIPs) are established by A) the federal government to provide municipalities a place to invest funds long term. B) states to provide municipalities a place to invest funds short term. C) states to provide municipalities a place to invest funds long term. D) local municipalities to allow states a place to invest funds short term. - ANSWER B) states to provide municipalities a place to invest funds short term. Your broker-dealer is a fully disclosed firm. This means that it A) acts as its own back office, performing all functions such as sending out customer statements. B) holds customer securities at the broker-dealer. C) introduces its business to a clearing agent. D) accepts customer funds to be held at the broker-dealer. - ANSWER C) introduces its business to a clearing agent. Which of the following may be considered suspicious? A) A client expressing undue concern about substantial commissions being charged to the account B) A customer unconcerned about losses C) Moving large sums of money between accounts with the same last names D) Transactions that alone, or in the aggregate, involve at least $2,000 - ANSWER B) A customer unconcerned about losses The residents of the city of Sandy Place, California, recently voted in favor of issuing a bond. The proceeds of the bond will be used to build a baseball stadium for the local minor league baseball team. Though the bond's costs are expected to be covered by the ticket revenue from the stadium, the bond contains a provision that requires the city to pay the bond's interest payments as well as pay the principal at maturity if the ticket sales are insufficient. This bond is an example of A) a mortgage bond. B) a senior debenture. C) a revenue municipal bond.   a general obligation municipal bond. - ANSWER D) a general obligation municipal bond. Changes in the overall economy that negatively impact securities values are called A) systematic risk. B) nonsystematic risk. C) unsystematic risk. D) universal risk. - ANSWER A) systematic risk. An investor who commits a sizable portion of her portfolio to long-term AAA rated bonds would be exposing herself to A) purchasing-power risk. B) uncertainty about the ability of the issuer to make timely payments of interest and principal. C) less market risk than if the portfolio were invested in money market instruments. D) liquidity risk. - ANSWER A) purchasing-power risk. Your customer is interested in Sierra Verde Coffee Company stock, which is currently trading at $22 a share. She would like to buy 400 shares, but not for more than $20 a share. Which order best meets her request? A) Buy limit at $20 B) Sell limit at $20 C) Sell stop at $20 D) Buy stop at $20 - ANSWER A) Buy limit at $20 The gross domestic product (GDP) for a country is best defined as A) all of the goods and services sold domestically. B) all of the goods and services produced within the nation. C) the difference between goods produced and services produced. D) all of the goods and services exported to other countries for consumption . - ANSWER B) all of the goods and services produced within the nation. Which of the following is a common way to reduce nonsystematic risk? A) Inflation B) Concentration C) Diversification D) Stratification - ANSWER C) Diversification Defined benefit retirement plans offer which of the following features? A) Plan assets vest after 12 months. B) Retirement payments are tax free after age 59½. C) The employee's benefits and length of service requirements are explained in the plan disclosure documents. D) Employees get to select their investment mix. - ANSWER C) The employee's benefits and length of service requirements are explained in the plan disclosure documents. Which of the following is not information required for Form U4? A) Felony conviction B) Home address C) Education D) Work history - ANSWER C) Education Which of the following companies is in a cyclical industry? A) A beverage bottler B) A gold mining company C) A heavy equipment maker D) A petroleum refiner - ANSWER C) A heavy equipment maker In general, a corporation assumes the least risk when it obtains funds from the sale of A) secured bonds. B) zero coupons. C) preferred stock. D) debentures. - ANSWER C) preferred stock. Automatic disqualification for an individual to be registered in the securities industry would not include A) having been found to enter a misstatement in the application for membership. B) being under an SEC order to be barred from associating with a broker-dealer. C) having been found as the cause of another associated person's suspension. D) being charged with a non-securities-related misdemeanor. - ANSWER D) - being charged with a non-securities-related misdemeanor. Your customer is very excited about Cavendish Carousel Corp., a maker of amusement park rides. He believes that the company is well poised to grow in the next several years. His attitude is described as A) bearish. B) bovine. C) brutish. D) bullish. - ANSWER D) - bullish. In a cash account, an investor must pay for a purchase by A) having at least 50% of the trade in the account. B) having the cash available in the account. C) depositing the entire amount of the trade by the settlement day. D) depositing at least 50% of the purchase price by settlement. - ANSWER C) depositing the entire amount of the trade by the settlement day. Which of the following mutual fund share classes has no back-end load, lower operating expenses, and low or no 12b-1 fees? A) Class A B) Class C upon conversion to Class B C) Class B D) Class C - ANSWER A) Class A A corporate stock transaction occurs regular way on Monday, August 3. Ownership of the securities is recognized as changing hands between buyer and seller on A) Wednesday, August 5. B) the trade date. C) Tuesday, August 4. D) Thursday, August 6. - ANSWER A) Wednesday, August 5. NuBuckle, Inc., is an established accessory maker that is listed on several major exchanges. If your client owns 200 shares of NuBuckle common shares, they have all of the following rights except A) a right to a dividend. B) a right to inspect the books. C) a right to vote for who will serve on the board. D) a right to transfer their shares as they see fit. - ANSWER A) a right to a dividend. Juan owns 1,000 shares of the big box retailer Buystuff, Inc. (Ticker: BSTF). He has owned the shares for 10 years and they have appreciated nicely. If Juan desires to generate income from the BSTF position, he could do which of the following? A) Buy 10 BSTF calls B) Sell 10 BSTF calls C) Sell 10 BSTF puts D) Buy 10 BSTF puts - ANSWER B) Sell 10 BSTF calls A member firm broker-dealer is found to be in violation of a Securities and Exchange Commission (SEC) federal regulation and could be subject to all of the following except A) revocation of the firm's registration. B) limits on activities the firm may participate in. C) jail sentences for directors and officers. D) monetary fines. - ANSWER C) jail sentences for directors and officers. A variable annuity's investment return each month is based on A) the performance of the separate account. B) the performance of the insurance company's general account. C) the contracts stated guaranteed monthly return. D) the assumed interest rate stated in the contract . - ANSWER A) the performance of the separate account. Under the Investment Company Act of 1940, an investment company may take all of the following forms except A) an open-end investment company. B) a unit investment trust. C) a limited partnership with partners as passive investors. D) a closed-end investment company. - ANSWER C. a limited partnership with partners as passive investors.